For Saurabh, a medical practitioner at a leading private hospital in Delhi, the wait for medical reports on one of his patients from Bihar was agonising. "At times, immediate treatment is essential," he said, "But it is difficult to prescribe without being familiar with the full medical history of the patient." Delays such as the one Saurabh faced often lead to problems. "Also, paper reports get old and illegible over time," he said. To address this gap in the health care system, two BTech (Bachelor of technology) students at the National Institute of Technology, Surathkal, Karnataka, designed a software in 2008. They called it Practo Ray. After consulting with doctors and tweaking it according to the feedback, they launched it commercially the next year. An instant hit "It was an instant hit," said 27-year-old Shashank N D, founder and chief executive officer of Bengaluru-based Practo. "Nearly 30,000 doctors use our software. We double our subscription every six months." An online software, it helps doctors and clinics upload and access the prescriptions, records and payment schedules of patients. "With the help of Practo Ray, doctors can share reports, helping cut costs for patients," said Bengaluru-based dentist Suman Reddy, one of the first to adopt it. Practo Ray provides 60 per cent of the company's revenue. It is not the only product. In 2013, the company launched Practo.com - a website to help patients find doctors and book appointments. This is how it works: Say, you are looking for an ophthalmologist in an upmarket area. You have to key in the relevant words and the website will provide you a list of doctors in the area. It also provides essential information like fees, their timings and contact details. It also allows one to book an appointment online. Listing of doctors and booking of appointments is free but Practo charges medical practitioners and clinics for "premium" listing. "It is not a mere directory; we don't add any doctor or clinic to our list without a physical verification," said Shashank. The website already has 125,000 doctors. "We get nearly four million searches every month," said Shashank. With a team of 1,000 people, the company aims to have a presence in 35 cities soon. At present, it has a presence in 10 cities. While company officials refused to share details of revenue, sources said Practo Ray enjoys a high margin.
The company got an initial round of funding of $4 million from private equity firm Sequoia Capital in 2011. In 2015, the company raised another $30 million from Sequoia Capital and Matrix Partners. "The ambition of the founders to build a large company and immense opportunity in India's health care sector is what attracted us to invest in Practo," said Tarun Davda of Matrix. Challenges ahead Practo's biggest challenge is the lack of standardisation in the health care sector. A multiplicity of entities in the diagnostic segment and different formats of prescriptions are some of the factors adding complexity to working in the sector. Digitising all records is a challenging task. Another challenge for Practo is its absence from the market dominated by big hospitals. At present, it focuses on doctors and small clinics. "We are about to make a transition but we are, at present, driving our business on small- and medium-sized clinics," said a company official. A lurking threat is the replicability of their business model - especially practo.com. Its management, however, does not agree. "We have a unique business model; we offer a whole new experience to consumers," said Shashank. Way forward The country's health care is estimated to be a $100-billion business, mostly driven by nearly 300,000 clinics, government and private hospitals. Practo has managed to reach nearly 6,000 clinics. The company, therefore, has the potential to grow manifold. "We believe the next big health care company will come out of India as the sector here is user-driven, unlike the insurance company-driven sector in the US and mostly state-dominated sector in western Europe. Practo has the potential to become a big company," said Davda. However, given the geographical spread and fragmentation of the market, the incremental cost of adding market share could be high. For the record, though, the company aims to have its presence in 100 cities and hopes to provide health records to all people in the country.
FACT BOX Name: Practo Area: Health care technology Founders: Shashank ND, chief executive officer; BTech in information technology from NIT, Surathkal; Abhinav Lal, chief technology officer, BTech in information technology from NIT, Surathkal Subscriber base: Practo Ray used by 30,000 doctors; Practo.com getting four million hits every month Recent funding: $30 million from Sequoia Capital and Matrix Partners
EXPERT TAKE Practo has been the first to identify a gap in the highly fragmented health care space and has come up with a technological solution that addresses a prevalent pain point for doctors. As a software-as-a-service business model, it is immensely scalable. The young founders have done a terrific job in scaling up their business, getting doctors on the platform and attracting top marquee venture capital firms Sequoia and Matrix to fund the venture. The winner-take-all model makes it difficult for the number two or three in the market to compete or disrupt. With a business-to-business to customer model, they can look at acquiring end-users without huge customer acquisition costs. They would need sales people on the ground, though, to sign up doctors and clinics. With the advantage due to innovators, and good funding, they are in the best position to take a crack at being the market leaders for long. They have quite a few challenges, too. The market size of the health sector in India remains unproven. They might need to expand outside India to keep up the momentum of growth. The writer is Ganesk K, a successful serial entrepreneur and chairman of Portea Medical